Walmart for this discussion primarily due to my love/hate relationship with
the retail giant. I cannot deny that they are a one-stop shop for anything from
pharmaceutical needs to groceries and even automotive and professional
hair care services. They indeed do have everything. It's the limited cashiers,
super long lines, and as of late, in the Neighborhood Markets, it is strictly
Self-checkout. Not to mention its reputation for poor employee
compensation. This leads to the point of this discussion; in a recent filing
with the US Securities and Exchange Commission, Walmart disclosed that
CEO Doug McMilon's compensation for the fiscal year ending 2022 is
$25,670,673.
As you can see from the chart below, his pay is 1013 times the median
employees pay for that fiscal year. This discrepancy places the retail giant
among companies with the widest pay gap between the CEO and an
essential employee. It is noteworthy to mention that in the "case of Walmart
-- a publicly traded and 'pay for performance' firm -- a significant portion of
CEO compensation is in the form of stock grants that are not realized until
the company meets certain goals." while I do believe and understand that
individuals holding an executive position do hold the weight of an entire
company on their shoulders and should be rewarded; I do not believe that
their compensation should be so grossly excessive to that of the people that
work on the frontline. Many of these frontline workers who were once
deemed "essential" are not being compensated with a living wage. The
average starting wage in US corporate-owned companies, such as Walmart,
is $10 an hour. Studies have shown that Walmart was one of the top four
employers of SNAP and Medicaid beneficiaries in every state. Meanwhile,
"CEO pay continues to be very high and has grown far faster in recent
decades than typical worker pay; exorbitant CEO pay means that the fruits
of economic growth are not going to ordinary workers."
https://aflcio.org/paywatch/highest-paid-ceos
Being that Walmart is a "pay based on performance" firm, auditing the
revenue process would be the best course of action to reduce the likelihood
of material misstatements and or fraud would be PCAOB AS 2401 #12
consideration of fraud in financial statement audit, which states "for many
companies, revenue is one of the largest accounts in the financial statements
and is an important driver of the companies operating results. In audits
under PCAOB standards, revenue typically is a significant account, often
involving significant risks that warrant special audit consideration."
References
Butler-Young, S. (2018). Pondering the Pay Gap: Inside Walmart's CEO-to-
worker compensation comparison. FN: Footwear News, 74(14), 8.
Messier, W. Glover, S. Prawitt, D. (2019). Auditing & Assurance Services:
A Systematic Approach 11th Edition. McGraw Hill Education.
Rosenberg, E. (2020, November 18). Walmart and McDonald's have the
most workers on food stamps and Medicaid, new study shows. The
Washington Post.
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